TaxTMI 
TaxTMI 
1970 (11) TMI 30
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....1-12-55 579- 5-0 12-12-55 1,800-0-0 13-12-55 2,036-3-0 ------------------ -------------------- 25,424-6-0 40,260-15-9 -------------------- --------------------- The Income-tax Officer found that in the books of account produced before him, the assessee had accounted for items aggregating to Rs. 26,306 as against the sum of Rs. 40,261 for which credit was given to the assessee in Uchanti Bahi of M/s. Goel Iron Stores. Similarly, it was found that as against the total sum of Rs. 25,424 debited to the assessee in the Uchanti Bahi of M/s. Goel Iron Stores, the assessee's books showed credits corresponding to Rs. 15,388 only on November 1, 1955. The Income-tax Officer formed the opinion that all the transactions which were recorded in the Uchanti Bahi of M/s. Goel Iron Stores pertaining to the assessee in fact pertained to it, as some of the entries in the Uchanti Bahi were also recorded in the assessee's books. On that plea, the Income-tax Officer held that the sum of Rs. 13,955, representing the difference between Rs. 40,261 and Rs. 26,306, represented the amount given by the assessee to M/s. Goel Iron Stores which was not recorded in the assessee's books. This amount was accor....
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.... 9,927 on December 6, 1955, and Rs. 16,378 on November 3, 1955, the weight being 354 maunds and 584 maunds, respectively. Thus, the amount of sales shown by the appellant on these two dates is lower than what was recorded in the Uchanti book of M/s. Goel Iron Stores. The appellant, however, tells me that the weight of the material supplied has been entered at the correct figure in the Uchanti book of M/s. Goel Iron Stores and, therefore, if the Uchanti book is a correct book belonging to them, then they must have inflated the price. The Income-tax Officer did not accept the appellant's different explanation and held that against the total credits of Rs. 40,261 shown in the Uchanti book, the appellant had accounted for only Rs. 26,306 and, therefore, the difference of Rs. 13,955 was treated by him as income from undisclosed sources. Shri Sagar Mal, in clear terms, admitted before the Income-tax Officer that the said Uchanti book did not belong to him. He also said that all the transactions with the appellant were duly entered in his cash book and ledger and there was not a single transaction of any Uchanti nature or otherwise which was not entered in the books. My predecessor, who ....
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...., therefore, deleted. " The Income-tax Officer filed an appeal before the Income-tax Appellate Tribunal which was accepted on August 13, 1962, and the addition of Rs. 13,955 deleted by the Appellate Assistant Commissioner was restored. The assessee-firm then applied for reference to this court under section 66(1) of the Income-tax Act, 1922 (hereinafter called "the Act"), which was declined by the Appellate Tribunal. The assessee then filed an application under section 66(2) of the Act in this court which was allowed and the Income-tax Appellate Tribunal was directed to draw up the statement of the case and refer the following question of law for opinion to this court : " Whether, on the facts and in the circumstances of this case, there was legal and admissible evidence to support the finding of the Delhi Bench 'B' of the Income-tax Appellate Tribunal contained in its order dated August 30, 1962, in respect of the assessment of income-tax on the assessee for the assessment year 1956-57 restoring the addition of Rs. 13,955 as income of the assessee from undisclosed sources ? " The only material before the Income-tax Officer on the basis of which the addition of Rs. 13,955 was ma....
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....mounting to Rs. 18,000. After that it was reduced to Rs. 3,100. The record available for the Uchanti book was entirely wrong. We had neither transacted any business outside the books that have been produced in the income-tax office nor we had earned any income excepting the one shown in those books of accounts. Q. If that Bahi did not belong to you, why did you pay the sum of Rs. 3,100 by your sales tax extra ? R. I am often ill and it is difficult to attend on days of hearing, besides the firm itself has come to a close and the other partners are not taking interest in the business of the firm. Q. Whether that Uchanti book is still in your possession? R. No. It is neither in our possession nor before this." It is evident from his statement that Sagar Mal did not support the entries in the Uchanti Bahi and no other material was brought on the record to connect the entries in the Uchanti Bahi with any transaction between the assessee-firm and M/s. Goel Iron Stores. In our opinion, the mere copy of the Uchanti Bahi supplied by the sales tax department, in the circumstances of this case, was not a legal or admissible evidence on the basis of which the addition of Rs. 13,955 could....
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....y not recovered it from M/s. Goel Iron Stores nor is it show on this record as to who recovered it from that firm. No official of the sales tax department was examined to know about this fact. It is also significant that in appeal the appellate authority under the Sales Tax Act agreed to accept from Shri Sagar Mal the sum of Rs. 3,100 instead of Rs. 18,000 which had been imposed by way of sales tax on the basis of that Uchanti Bahi, which clearly shows that even the appellate authority was not convinced that the Uchanti Bahi was a genuine book which could be explicitly relied upon. Under the circumstances, greater responsibility lay in the Income-tax Officer to satisfy himself about the entries enumerated in the copy supplied to him, more particularly because Shri Sagar Mal, who was produced as a witness before him, categorically denied that that Uchanti Bahi was recovered from his firm or belonged to his firm. He also denied the entries mentioned in the copy. The Appellate Assistant Commissioner of Income-tax rightly rejected that document by giving cogent reasons in support of his conclusion and that is why we have given an extensive quotation from his order bearing on this point....